What must a LearningRx franchisee promptly pay upon termination of the franchise agreement?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
t to complete all contracted training services;
- (c) All expense items recorded on Franchisee's books must be recorded at commercially reasonable rates and must relate directly to the operation of the Business including, but not limited to salary and compensation expenses and other expenses paid to or on behalf of Franchisee's family members and other persons not working for the Business on a regular, full time basis.
- 13.7 Post-termination payments. Franchisee is required to continue to pay Royalty and Marketing Development Fund fees based on Gross Revenues Franchisee collects on prepaid or ongoing monthly payments for use of Franchisor's training programs. In the event Franchisor agrees that Franchisee may continue to train students using Franchisor's Product after the Franchise Agreement is terminated, Franchisee may do so only until the client's prepaid or monthly payment for current program is complete. Notwithstanding the foregoing, once a client's then-current prepaid monthly program concludes, Franchisee will cease using Franchisor's Program for that client. If Franchisor grants this continuing right, Franchisee agrees that Franchisor's audit rights will survive termination of the Agreement.
14. TRANSFER
- 14.1 Prohibited Acts. Any unauthorized Transfer or other conveyance, by operation of law or otherwise, or any attempt to do so, shall be deemed void, a breach of this Agreement, and grounds for termination of this Agreement by Franchisor.
- 14.2 Transfer by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to LearningRx's 2025 Franchise Disclosure Document, a franchisee is required to continue paying Royalty and Marketing Development Fund fees based on Gross Revenues collected on prepaid or ongoing monthly payments for the use of LearningRx's training programs after the Franchise Agreement is terminated. If LearningRx agrees that the franchisee may continue to train students using LearningRx's product after termination, the franchisee can only do so until the client's prepaid or monthly payment for the current program is complete. Once a client's current prepaid monthly program concludes, the franchisee must stop using LearningRx's Program for that client. If LearningRx grants this continuing right, LearningRx's audit rights will survive the termination of the Agreement.
Additionally, the franchisee must comply with all obligations that survive termination, including those related to non-competition, confidentiality, and indemnity, as well as the obligations set forth in Section 13.2(a)-(g) of the agreement. The franchisee must also deliver all contracted training services, provide prorated refunds for all undelivered services to clients under contract (with evidence of such refunds prior to the termination date), or make arrangements with all clients under contract to complete all contracted training services by the expiration of the Notice Period.
Furthermore, the franchisee is responsible for promptly paying all taxes, fees, debts, expenses, and assessments of the franchised Business, including payroll taxes. They must also ensure that all expense items recorded on their books are at commercially reasonable rates and directly related to the business operation, including salary and compensation expenses paid to family members or others not working full-time for the business. The franchisee must also pay interest at a rate of 1% per month (or the maximum rate allowed by law, if lower) for any late payments or payments returned due to insufficient funds, as well as any damages, expenses through appeal, collection costs, and reasonable attorneys' fees incurred by LearningRx due to the franchisee's failure to make required payments or due to returned payments.